Everything you need to know about PayPal's G&S fee — what it is, how much it costs, why it's mandatory for business, and how it compares to alternatives.
PayPal Goods and Services (G&S) is PayPal's payment method for any transaction where goods or services are exchanged. Unlike Friends and Family payments, G&S includes full buyer and seller protection — and a processing fee.
Since 2023, PayPal has significantly tightened enforcement of its G&S vs F&F policy. Any business payment — freelance work, selling products, providing services — must use Goods and Services. Using Friends and Family for business is a Terms of Service violation that can result in account bans and fund holds.
| Feature | Goods & Services | Friends & Family |
|---|---|---|
| Fee (USA) | 2.99% | Free (bank/balance) |
| Buyer protection | ✅ Full coverage | ❌ None |
| Seller protection | ✅ Full coverage | ❌ None |
| Required for business? | ✅ Yes — mandatory | ❌ Violates ToS |
| Dispute resolution | ✅ PayPal mediates | ❌ Not available |
| Account ban risk | ✅ None | 🔴 High for business use |
| Fund hold risk | Low | 🔴 Up to 180 days |
| Payment Amount | PayPal G&S Fee | You Receive | Effective Rate |
|---|---|---|---|
| $25 | $0.75 | $24.25 | 2.99% |
| $50 | $1.50 | $48.50 | 2.99% |
| $100 | $2.99 | $97.01 | 2.99% |
| $250 | $7.48 | $242.52 | 2.99% |
| $500 | $14.95 | $485.05 | 2.99% |
| $1,000 | $29.90 | $970.10 | 2.99% |
| $5,000 | $149.50 | $4,850.50 | 2.99% |
It depends on the amount. PayPal G&S is 2.99% with no fixed fee, while Stripe is 2.9% + $0.30. Below about $333, G&S is slightly cheaper (on $100: $2.99 vs $3.20); above it, Stripe wins. Either way the difference is small — the bigger gap is PayPal Checkout on a website, which costs 3.49% + $0.49. Here's the comparison for one payment a month:
| Monthly Volume | PayPal G&S Cost | Stripe Cost | Cheaper option (one payment a month) |
|---|---|---|---|
| $1,000/mo | $29.90 | $29.30 | Stripe, by $7.20/year |
| $5,000/mo | $149.50 | $145.30 | Stripe, by $50.40/year |
| $10,000/mo | $299.00 | $290.30 | Stripe, by $104.40/year |
| $50,000/mo | $1,495.00 | $1,450.30 | Stripe, by $536.40/year |